Job crisis for real as unemployment hits 6.1%, highest in 45 years

A day after taking took oath, the National Democratic Alliance (NDA) government released the first periodic labour force survey (PLFS) which showed the unemployment rate at a 45-year-high of 6.1 per cent in 2017-18.
Chief statistician Pravin Srivastava, while releasing the report, said the figures from the past were not “strictly comparable” due to a change in sampling design and frame, but the PLFS report itself has compared figures from the past. The report has also given an explanatory note on the change in sampling design, data collection methods, sample collection, among others.
Business Standard was the first to report in January that the unemployment rate had risen to a 45-year-high, as per the NSSO’s PLFS report of 2017-18. However, the government had termed it as a ‘draft report’ then.
The National Statistical Commission (NSC) – an independent body for monitoring the country’s statistics and its framework – had approved the report in December last year but the government withheld the release of the report. This was one of the reasons which had led to the resignation of PC Mohanan, the acting chairman of the NSC, and another member, JV Meenakshi in January this year.
ALSO READ: Unemployment rate at four-decade high of 6.1% in 2017-18: NSSO survey
“Whenever you launch a new product, it needs to be tested and hence, it takes take,” Srivastava said, while justifying the delay in releasing the report. He said that though the report, approved by the NSC, had compared figures from the past NSSO reports, a need for review was felt. “The report was referred to a standing committee which has given its report last week itself,” he said.

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According to the PLFS report data, the labour force participation rate (LFPR) – the proportion of population either seeking jobs or are employed – fell to below 50 per cent. The LFPR stood at 49.8 per cent in 2017-18, compared to 55.9 per cent in 2011-12.
Significantly, the unemployment rate among youth, those between 15 and 29 years of age, rose sharply in 2017-18. It stood at 27.2 per cent for urban females in 2017-18, compared to 13.1 per cent in 2011-12, 18.7 per cent for urban males (8.1 per cent in 2011-12), 13.6 per cent for rural females (from 4.8 per cent in 2011-12) and 17.4 per cent for rural males (from 5 per cent).
ALSO READ: Unemployment rate at four-decade high: NSSO survey compared past figures
The Ministry of Statistics and Programme Implementation clarified that the criteria for “second stage stratification” was changed to education status from consumption expenditure which was used to do surveys earlier. “There is no question of any comparison as there is a change in the way of measurement. Education has played an important role with level of education rising in the country and it was felt that it should be taken as a criterion for the survey,” Srivastava said.
“The results of the PLFS need to be understood and used in the context with which the survey methodology and sample selection has been designed,” the NSSO report stated.
Srivastava said that the consumption expenditure survey, which is slated to release in June end, will capture some trends of employment and unemployment which may be compared with the past NSSO reports.
Job crisis for real as unemployment hits 6.1%, highest in 45 years

Why PM Modi chose Nirmala Sitharaman for the finance ministry job

Partly by default, and partly by design, Prime Minister Narendra Modi has managed to assemble a newish-looking team for his second term. Hopefully, the freshness will carry over to ideas.
The top job in the finance ministry opened up as Arun Jaitley, who held the position during Modi’s first five-year term, made himself unavailable for health reasons.
The prime minister picked Nirmala Sitharaman to become India's first full-time female finance minister. (1) Sitharaman previously handled defense and commerce but lacks the experience typical for what's traditionally considered the cabinet's No. 2 job, having been a member of parliament for only five years. Several of India's past finance ministers have gone on to become prime ministers and presidents.
So perhaps the prime minister himself wants to be closely involved in supervising the economy. That's good and bad. Decisive leadership is required to unclog the jammed financial channels, speedily privatize state-run businesses, and give private investments a decisive push. The risk with strongmen leaders is that they tend to give short shrift to institutions and independent-minded counsel, something that Sitharaman herself will need to be mindful of when implementing her boss's plans.
What the new Indian finance minister lacks in heft, she must make up with organizing ability, as a sort of coordinating minister for economic affairs. A signature reform investors expect from Modi's second term is a new labor law – a single, flexible code to replace a plethora of antiquated rules. With Sitharaman as the point person for finance, and Modi keeping a close tab, the labor ministry will be working overtime to deliver a bill. Ditto for land acquisition, a major roadblock for infrastructure and industrial projects, as my colleague Anjani Trivedi wrote recently. The BJP has a comfortable single-party majority in the lower house of parliament, and may gain control of the upper house by next year. That augurs well for a simplified, less-time-consuming law for acquiring and pooling farmland for new purposes, something Modi was unable to carry through in his first term.
Sitharaman's not-to-do list will be equally crucial. Given how badly India needs risk capital from the rest of the world, one of her priorities will be to rein in an overzealous bureaucracy itching to raid the central bank's reserves. That misadventure, if encouraged, would further emasculate the Reserve Bank. Her other task will be to extricate the government think tank from meddling in GDP statistics, whose quality has recently become a pet peeve of investors.
While Sitharaman as finance minister is a somewhat surprising selection, the most inspired choice in Modi's new cabinet is a non-politician. As a diplomat, Subrahmanyam Jaishankar negotiated with the George W. Bush administration to win US acceptance of India as a legitimate nuclear power. A former ambassador to both the US and China, Jaishankar – as the new foreign minister – can help New Delhi tiptoe around the trade spat between Washington and Beijing. New Delhi has much to gain from a remaking of global supply chains, as well as much at risk from a tech cold war. The digital Iron Curtain, as my colleague Tim Culpan calls it, will be a challenge for the Modi government’s second term. Even as President Donald Trump is determined to isolate Huawei Technologies Co., the Chinese electronics firm is making a strong bid to participate in fifth-generation, or 5G, mobile services in India.
Then there's the broader trade question. China is importing more from other countries to cut reliance on US suppliers. That's helping India slash its annual trade deficit with China by $10 billion to $53 billion. Still, the country's overall trade deficit hit a five-month high in April. Unless the new commerce minister, Piyush Goyal, is able to lift stagnant exports, any revival in domestic demand – or an increase in global oil prices – could destabilize the rupee and derail reforms. Modi's new team has its work cut out.

PM Modi's first cabinet meeting rolls out funds for farmers, traders

The new Union Cabinet, headed by Prime Minister Narendra Modi, in its first meeting approved a number of schemes aimed at the rural sector and traders.
It cleared the extension of benefits of the PM Kisan scheme to all landholding farmers, providing them Rs 6,000 per year.
The additional outlay of this scheme will be around Rs 13,000 crore per annum. This means the outlay for PM Kisan, going by the numbers for 2019-20, given in the Interim Budget, will be Rs 88,000 crore, including the Rs 75,000 crore allocated for small and marginal landed farmers.
The Cabinet also approved a pension scheme for farmers and a similar scheme for traders. No outlay for traders was provided while for farmers, the Centre will spend Rs 10,774.5 crore for three years.
“In the Kisan Samman Yojana, Rs 6,000 would be disbursed, in three equal instalments of Rs 2,000 to all farmers. In its earlier avatar, the scheme was restricted to only small and marginal farmers. More than 145 million farmers are expected to be covered under the scheme. This is expected to cost the exchequer Rs 88,000 crore every year,” said Prakash Javadekar, minister of environment and information and broadcasting.

ALSO READ: UP government to enroll 11 million farmers under PM Kisan scheme
An official statement said certain operational issues related to PM Kisan, like lack of updated land records in Jharkhand and the lack of Aadhaar penetration in Assam, Meghalaya, and Jammu and Kashmir, had been resolved.
On Friday, the government announced the Kisan Pension Yojana, under which any farmer in the age group 18-40 can join by paying a premium of Rs 2-7 a day. This will give farmers a minimum fixed pension of Rs 3,000 when they turn 60, with the Centre matching the amount paid by each farmer.
Javadekar announced the Cabinet cleared a similar scheme for small traders whose annual income is less than Rs 1.5 crore. This was a key demand of the Confederation of All India Traders, which had decided to support Modi after the BJP's assurance that trader welfare would be priority for the new government. Small traders do not come within the ambit of the goods and services tax and nearly 50 million traders are expected to join the scheme over the next three years.
Traders can enrol themselves through common service centres. The scheme proposes a Rs 2 per day premium for those entering at the age of 18, Rs 100 per month premium for those of 29, and Rs 200 per month for those who are 40 and above. Again, the Centre will make matching contributions to the subscribers’ accounts.
ALSO READ: Centre to save Rs 10,600 crore on PM-Kisan scheme this fiscal year
With an eye on eradicating the highly contagious foot and mouth disease, which afflicts thousands of bovine animals every year, the government has decided to expand vaccination efforts for all cattle, Javadekar said.
“This includes buffaloes, cows, sheep, goats and pigs, crores of which fall prey to this and other diseases every year,” he said.
“The government has now decided to provide universal vaccination for such animals. Sixty per cent of the cost of existing schemes in the domain is borne by the government with the rest provided by states,” he said.
Animal husbandry has been a strong focus of the Modi government and in keeping with the election promises, Rs 13,000 crore will be disbursed for the new scheme, with the Centre picking up the entire bill. The government targets the reduction of milk loss and infertility among cattle.
India has been keen on getting access to the massive Chinese dairy and meat market but successively talks have faltered due to Beijing's reservations about the health of Indian cattle.

Finance to foreign affairs: Modi's message in portfolios for new ministers

The story of portfolio distribution of a Council of Ministers is as much in who the prime minister picked for a particular portfolio as it is in those he did not. On Friday afternoon, the Rashtrapati Bhavan released the list of portfolios allocated to 57 ministers — 24 of cabinet rank, nine ministers of state with independent charge, and 24 ministers of state.
The list of ministers sworn in on Thursday revealed that the prime minister rewarded MPs who won their respective Lok Sabha seats against heavy odds or included those known to hail from humble backgrounds.
He dropped those perceived to be non-performers or whose integrity came into question, and also where it was felt they needed to learn a lesson or two in humility. It is, however, possible that some of the 37 dropped, especially those who have returned to the Lok Sabha, will make a comeback when the prime minister expands his cabinet. In 2014, Modi expanded his cabinet in November, when he added 21 ministers to the 40-odd who had taken oath of office on May 26 that year.
The message from portfolio distribution was that of a mix of continuity and change. As many as seven economic ministries will now see new leaders — the ministries of finance, commerce and industry, agriculture, telecommunications, civil aviation, and tourism.
In contrast, those in charge of the infrastructure ministries of railways, surface transport, roads, shipping, power, coal and petroleum in the previous government continue to remain part of the new Cabinet.
ALSO READ: Meet the members who come from a humblest background in Modi's team
Significantly, the imprint of senior Bharatiya Janata Party (BJP) leader Arun Jaitley, who is unwell and not part of the Cabinet, is evident in portfolio distribution. Several who count him as their mentor are in charge of key portfolios, including Nirmala Sitharaman, Hardeep Puri and Anurag Thakur.
Portfolio distribution ended speculation on whether BJP President Amit Shah or party Treasurer Piyush Goyal could get finance. The prime minister opted to transfer Nirmala Sitharaman from defence to finance and corporate affairs. As in the ministry of defence, so in the finance ministry, Sitharaman follows in the footsteps of Indira Gandhi. She is only the second woman to be finance minister of India. Thakur is her minister of state.
Shah is the new home minister of the country. He was home minister in Gujarat when Modi was chief minister of the state. Rajnath Singh, number two in the government, will now helm the defence ministry. He was home minister in the previous government.
Former foreign secretary S Jaishankar is the new external affairs minister. Goyal will continue as railway minister and replaces Suresh Prabhu as minister for commerce and industry.
Nitin Gadkari will continue to handle the road transport and highways portfolio, but loses the ministry of shipping. The prime minister, however, has decided to rely on Gadkari’s experience and expertise as an entrepreneur by handing him the MSME (Micro, Small and Medium Enterprises) portfolio. With the Centre releasing the jobs data on Friday, the ministry would be crucial to spurring job growth.
ALSO READ: PM Modi's first cabinet meeting rolls out funds for farmers, traders
Agriculture is another sector of concern. Narendra Singh Tomar replaces Radha Mohan Singh, who is no longer part of the cabinet, as agriculture minister. Tomar, rural development and panchayati raj minister in the previous government, will continue with that portfolio.
Dharmendra Pradhan will continue as oil minister, while Mahendra Nath Pandey, the BJP’s UP state unit chief, is the new minister of skill development and entrepreneurship.
The Shiv Sena, the BJP’s oldest ally, retains the heavy industries and public enterprise ministry but with the change in personnel. Arvind Sawant has replaced Anant Geete here. The prime minister has reposed faith in some ministers of state with independent charge, particularly those who implemented key schemes of his previous government.
Former bureaucrat R K Singh continues to be power minister. Puri will not only continue to handle the housing and urban affairs portfolio, but also has the additional responsibility of the ministry of civil aviation with independent charge.
Mansukh Mandavia has got independent charge of the ministry of shipping. In the previous government, he was junior minister to Gadkari in the ministry of shipping, road, transport and highways.
Gajendra Singh Shekhawat, who retained his Jodhpur seat by defeating Vaibhav Gehlot and is considered the BJP’s new star in Rajasthan, is the new cabinet minister for ‘Jal Shakti’, which comprises water resources, river development and Ganga rejuvenation. Smriti Irani, who defeated Congress President Rahul Gandhi, is now the minister handling not just textiles portfolio but also women and child development.
Ministers like Harsh Vardhan and Prakash Javadekar have returned to their initial portfolios of Modi government 1.0. Javadekar has returned to environment and forest and will also handle information and broadcasting, while Harsh Vardhan has returned to the ministry of health, but also continue to handle the science and technology portfolio. Ramesh Pokhriyal ‘Nishank’, who won from Hardwar, is the new human resource development minister. Ravi Shankar Prasad, who has debuted in the Lok Sabha after long years in the Rajya Sabha, retains his portfolios of law and justice, communications, electronics and information technology.
ALSO READ: Modi cabinet ministers full list: Amit Shah Home Minister, Sitharaman FM
D V Sadananda Gowda, in recognition of the BJP’s good performance in Karnataka and with an eye on the state’s caste balance, is minister of chemicals and fertilisers, while state colleague Pralhad Joshi is the new cabinet minister for coal and mines as well as parliamentary affairs.
The late Ananth Kumar, who was also from Karnataka, was minister for both chemicals and fertilisers as well as parliamentary affairs in the previous government. Haryana, Maharashtra and Jharkhand, three states scheduled for Assembly polls by October, have representation in the council.
With an eye more on optics, several known to hail from humble backgrounds are ministers of state, including Odisha’s Pratap Chandra Sarangi, Assam’s Rameswar Teli and Rajasthan’s Kailash Choudhary.
According to an analysis by the Association for Democratic Reforms (ADR), the electoral watchdog, the number of ministers facing criminal cases has increased from 31 per cent in 2014 to 39 per cent in 2019.
Sarangi, associated with the Bajrang Dal, whose activists had killed Christian missionary Graham Staines in Odisha’s Keonjhar in 1999, leads the way. He faces seven cases of what the ADR terms “serious” Indian Penal Code sections, and 15 other cases.

Donald Trump terminates preferential trade status for India under GSP

President Donald Trump has terminated India's designation as a beneficiary developing nation under the key GSP trade programme after determining that it has not assured the US that it will provide "equitable and reasonable access to its markets."
The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
"I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019," Trump said in a proclamation on Friday ignoring the plea made by several top American lawmakers.

On March 4, Trump announced that the US intends to terminate India's designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
The Trump administration has prioritised working with the Government of India to ensure that US companies have a level-playing field, a senior State Department official told reporters on Thursday, hours after Narendra Modi was sworn in as Prime Minister for a second time following his spectacular electoral victory in the general elections.
Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
India was the largest beneficiary of the programme in 2017 with USD 5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with USD 1.7 billion in covered imports, according to a Congressional Research Service report issued in January.
The GSP criteria includes, among others, respecting arbitral awards in favour of the US citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection, and providing the US with equitable and reasonable market access.
Countries can also be graduated from the GSP programme depending on factors related to economic development.
In a statement, Coalition for GSP executive director Dan Anthony said Trump's decision will cost American businesses over USD 300 million in additional tariffs every year.
"Without GSP benefits American small businesses face a new tax that will mean job losses, cancelled investments and cost increases for consumers. Only a year after the Senate and House passed a three year reauthorisation of the GSP by a near unanimous margin, the Trump administration has kicked out the GSP country that saves American companies more money than any other," he said.
Anthony said the Trump administration made the decision in the face of opposition from members of the Congress and hundreds of American businesses that have called for continued GSP eligibility for India.
"They also acted despite India's willingness to negotiate new market access for American exports. Thus, there are no winners from today's decision. American importers will pay more, while some American exporters will continue to face current market access barriers in India and others, including farmers, are very likely to be subject to new retaliatory tariff, Anthony said.
The Trump administration argues that New Delhi has failed to assure America that it will provide equitable and reasonable access to its markets in numerous sectors.
Meanwhile, India had said that the US government's move to withdraw duty concessions on certain products under the GSP programme will not have a significant impact on exports to America as the benefits were only about USD 190 million annually.
Commerce Secretary Anup Wadhawan in March said despite the fact that India was working on an "extensive and reasonable" trade package, the US decided to go ahead with its decision to scrap the preferential trade benefit.
The package was covering all concerns related to bilateral trade with the US on sectors including medical devices, dairy products and agricultural goods, he said adding that India could not negotiate issues concerning interests of public healthcare.
In a statement in March, the US Trade Representative (USTR) said that India has failed to provide the US with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.
The Trump administration had launched an eligibility review of India's compliance with the GSP market access criterion in April 2018.
"India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion," the USTR said.

Nations buying oil from Iran beyond accepted levels will face sanctions: US

Any efforts to import Iranian crude oil beyond the accepted levels negotiated from November to May will be sanctioned, the US has warned, amidst reports that India and China were seeking ways to buy oil from Tehran.
US President Donald Trump last month refused to give waivers to countries like India from buying oil from Iran, in an attempt to reduce Iran's oil exports to zero.

The US on Tuesday reiterated its position after the media reports from New Delhi, quoting unnamed government officials, said that India was looking at ways to resume oil imports from Iran despite the US sanctions.
Last week, India's Ambassador to the US Harsh Vardhan Shringla said India had stopped buying oil from Iran after May 2 when the US ended its waivers that allowed the top buyers of Iranian oil, including India, to continue their imports for six months.
"There will be no more oil waivers granted and the only oil that would have been permitted would have been under the cap that we negotiated. That cap was negotiated, it was to run for a period from November of 2018 until May of 2019," Brian Hook, Special Representative for Iran and Senior Policy Advisor to the Secretary of State, told reporters during a conference call on Thursday.
He said once the countries have reached the cap of what was negotiated, that would be the limit of the oil that US would permit to move through and would not be sanctioned.
"We will sanction any efforts to import Iranian crude oil beyond the limits that were negotiated in the period that ran from November through May," Hook said.
Responding to the question that India and China were importing a little bit of Iranian oil, he said: "The countries that you mentioned I think every country is aware of it. We now have close to 30 countries that used to import Iranian crude oil that are now at zero. This accounts for 40 per cent of the regime's revenue".
Iran earlier used to supply 10 per cent of India's oil needs.
After coming to power, President Trump withdrew from the Iranian nuclear deal last year and has imposed stringent sanctions against what he describes as the "authoritarian" Iranian regime.
"If we want to get serious about denying Iran the money it needs to destabilise the Middle East, we have to enforce oil sanctions. We think all countries in the world share a desire for a more peaceful and stable Middle East. For as long as Iran is able to conduct its foreign policy with impunity fuelled by oil revenue, it is going to be unstable," Hook said.
That has been the message of the Trump Administration to all these countries, he said.
"Nations know that if there are efforts to import Iranian crude oil beyond the accepted levels that were negotiated back from November through May, they will be sanctioned," he asserted.
State Department Spokesperson Morgan Ortagus reiterated that it was the policy of the Trump administration to take Iranian oil export to zero and there will be no extensions on these waivers.
"That remains our policy," she said.
Ortagus said the US policy on Iran was working.
"We see the compliance with US sanctions regarding Iran writ large to be one of the most successful things that this administration and that this State Department has done," she said.
Later, a Senior State Department official told a group of reporters that India's developing of the Chabahar port in Iran was exempted from the Iranian sanctions.
"That exemption continues. It's not being reviewed. The exemption allows for the development of the port, the development of the rail link to Afghanistan, the provision of crude oil and gas to Afghanistan and the provision of humanitarian supplies as well. That continues," the official said.
The official said the Trump administration welcomed India's efforts to further develop trade with Afghanistan.
India continued to play a leading role and is providing humanitarian assistance, including wheat, which has gone through the Chabahar port.
The US was having an ongoing conversation with India on Iran, the official said, adding that America welcomes the fact that India has reduced its crude oil imports from Iran.
"I don't see frankly a difference in concerns over the prospect of a nuclear Iran. I don't believe it's in India's interest and Indian officials are forthright in saying that they do not want to see a nuclear Iran," the official said.
"I think that there are shared concerns over Iran support for terrorism, including in the Gulf where six million Indians work. So there's a lot that unites the US and India when it comes to analysing and assessing Iranian activity," the official said.
The US is seeking to ramp up pressure on Iran to counter what the White House perceives to be a potential threat.
Last month, the US designated Iran's Revolutionary Guard a foreign terrorist organisation, the first time the designation has been applied to a government entity.

Why giving Gadkari the MSME ministry may be a most inspired decision

The allotment of the Ministry of Micro and Small Enterprises in Prime Minister Narendra Modi’s new Council of ministers to Nitin Jairam Gadkari, in addition to the road transport and shipping portfolio, is not surprising. As a ballast for employment generation in the economy, the role of the MSME sector is massive, but it has underperformed. Significantly, in the past two decades, no minister so senior in the protocol has been awarded this ministry. Gadkari ranks fourth in the Cabinet.
In the past five years, almost every time the government has faced a challenge in some sector of the economy, it is Gadkari to whom Modi has turned. He has, to use a cliche, been a sort of champion for sputtering causes in the National Democratic Alliance (NDA) government.

Of these, the most recent was a turnaround in cleaning of the Ganga river, which personally rebounded to the credit of Modi in Varanasi. At a larger level, the demonstration effect of the river cleaning was dramatic. It finally seemed plausible that India’s challenge to get its rivers as viable pieces of economic trunk routes would fall into place. The creation of the new omnibus ministry of Jal Shakti in the Union council of ministers sworn in on Thursday, combining all the water-related departments — Namami Gange, drinking water and irrigation into one place is a testament to this achievement.
Similarly, in 2014, when Gadkari walked in as the minister for road transport and highways, the pace of construction had dipped to just about 12 kilometres per day. Construction companies had abandoned projects in droves and it was difficult to figure out how the sector could be revived. From there, the pace of construction of roads in 2019 reached over 32 kilometres a day. Investment reports are clear that the road sector has acted as a major investment multiplier for the economy — and at times been the only one for a fiscally constrained economy. Signature projects like the new bridge over the mighty Brahmaputra or the East and West Peripheral Expressways ringing the NCR have been the visible demonstrators of these initiatives. This is where the usefulness of Gadkari comes in.
It is of course a big challenge to presume that Gadkari can do the same turnaround for the MSME sector. The sector, despite its potential, defies a single solution. Yet, there is no doubt that if India has any hope to get a strong handle for growth of employment, this is the sector to look to. The National Sample Survey’s 73rd round estimates that in 2015-16 the MSME sector created 111 million jobs, of which 36.04 million were in manufacturing and another 38.72 million in trade in both rural and urban areas across the country. It ranks second only to agriculture, and there is no doubt that it has to rebound for the growth rate of the Indian economy to climb.
Gadkari has a penchant for crafting innovative solutions to economic governance issues. Plus, he is known as one to speak his mind, often to the perceived embarrassment of the party. Unless one presumes that this is one of the reasons for the allotment, since the MSME sector has always been the Waterloo of ministers in NDA or the United Progressive Alliance before it, this could be a most inspired decision by Narendra Modi in his list of ministers. A lot will ride on whether Gadkari can change the history of the MSME sector.

Tax saving tips: Invest in real estate and save tax on LTCG

Investments in real estate are borne out of savings made out several years of earnings. These investments have both monetary value and emotional value for investors. Individuals buy and sell real estate to reinvest in upcoming real estate projects, to meet growing family needs, to move to another location of choice etc. Since real estate investment involves a large amount of money, the sale of property results in large gains. Tax may have to be paid on these gains unless they have been invested. Let’s find out how to save tax on sale of a property.
Taxpayers can save the taxes on the gains by availing the benefit of tax exemptions allowed under the Indian tax laws. The law allows a taxpayer to invest in real estate and avail the benefit of exemptions on taxable gains realised on the sale of assets or real estate.
A.Tax saving exemptions:
I.Investment in real estate upon exit from a real estate property
Individuals who have earned gains upon exit of a residential house and wish to reinvest in another residential house can avail of an exemption from taxation of the capital gains.
For example:
Mr A sells his residential house on 5th April 2018 for Rs 50,00,000. Mr A had bought the house for Rs 20,00,000 on 25th March 2013. With the proceeds of the house, Mr A purchases a new residential house for Rs 60,00,000. The calculation of the capital gains and the exemption would be as below:
tax-table To claim this exemption the property which is sold should have held by a taxpayer for more than 2 years.
The above exemption is now extended w.e.f 1 April 2019 to investment in 2 residential properties (once in a lifetime benefit), the one condition being that the gains are not above 2 crore rupees.
II.Investment in real estate upon the sale of any other asset
Individuals who have earned gains upon sale of any other asset and desire to invest in a residential house can avail an exemption from taxation of the capital gains. Other assets would include land, gold etc.
Illustratively:
Mr B sells a plot of land on 5th April 2018 for Rs 80,00,000. Mr B had bought the land for Rs 40,00,000 on 25th March 2013. With the proceeds of the land, Mr B purchases a new residential house for Rs 60,00,000. The calculation of the capital gains and the exemption would be as below:

LTCG-table
To claim this exemption the property which is sold, should have held by a taxpayer for more than 2 years.
B.Other conditions attached to the exemptions mentioned above:
Period available for investment:
A taxpayer can acquire a residential house within a span of 2 years. A residential property which has been purchased a year before the sale would also qualify for an exemption. In the case of under construction properties, taxpayers have up to 3 years to complete the construction.
Deposit in Capital gains account scheme:
Taxpayers who are unable to invest the proceeds/capital gains have the benefit of depositing the amount of gain/sale consideration in a Capital gains account scheme. The deposits have to be made with any branch of a public sector bank on or before the due date for furnishing of the income tax return of the year in which property was sold.
Taxation of the unutilised amount in the Capital gains account scheme:
Taxpayers have to utilise the amounts deposited in the Capital gains account scheme. If they fail to utilize this amount within the specified time, they will have to pay tax on the gains which were earlier exempted at the end of 3 years from the date of sale of the property/asset.

Zuckerberg's security chief put on leave over allegations of racist remarks

Mark Zuckerberg’s personal security chief has been placed on administrative leave amid allegations that he made racist and homophobic remarks about people including the Facebook Inc. founder’s wife.
Liam Booth allegedly made the remarks about Zuckerberg’s wife, Priscilla Chan, and some of the employees at their household, Business Insider reported earlier, citing legal letters from the former household staff. A spokesman for the Zuckerberg and Chan family office said Booth has been placed on leave while an outside law firm investigates. It didn’t confirm the precise nature of the allegations published by Business Insider.

“The family office takes complaints of workplace misconduct very seriously,” the spokesman told Bloomberg News in an email. “The allegations against Liam Booth were brought to the office’s attention for the first time by the Bloom Firm after both former employees had left employment by the family office and engaged legal counsel.”
Lisa Bloom of the Bloom Firm confirmed by email that she represents “the two individuals who have raised claims”. She declined to identify the people involved or share details on the allegations.
Booth is a former Secret Service officer, according to his LinkedIn profile. He didn’t immediately reply to a message outside of US business hours.
Facebook’s costs for Zuckerberg’s personal protection amounted to $9.96 million in 2018, regulatory filings show. The chief executive officer also gets an additional annual $10 million allowance to cover security expenses for himself and his family.

A near-term policy agenda for the new govt

The National Democratic Alliance’s decisive election victory has understandably buoyed markets and raised expectations of big-bang reforms (land, labour, capital) to drive the next burst of growth. It’s important, however, for policy-makers not to get ahead of themselves. The first order of business must be to stabilise an economy that finds itself on a precarious wicket.
Growth has slowed discernably in recent quarters. To be sure, some of the pressures are transient: Sharp cuts in government spending to meet the 2018-19 fiscal deficit target, election-related uncertainty, and regulatory-induced one-time price-increases in the auto sector. These pressures will reverse in the coming months. But, even adjusting for this, underlying growth momentum has slowed meaningfully. Indian growth has largely been flying on one engine — consumption — which has progressively exhausted itself. Rural consumption is hurting because the terms-of-trade confronting agriculture continued to worsen in 2018-19. Slowing urban consumption reflects the disruptions in the non-banking finance companies (NBFCs), auto and housing sectors, as well as the inevitable limits of dipping into savings to prop-up consumption when income growth has slowed. Simultaneously, the outlook for exports has worsened as global trade wars deepen. Slowing exports and consumption together create the worrying prospect of hysteresis. Therefore, even as the strong election result is likely to rekindle animal-spirits, they must contend with formidable headwinds.

The real challenge, however, is that counter-cyclical policy space is either exhausted or currently inefficacious. Calls for a fiscal stimulus appear irresponsible, since India’s total public sector borrowing requirement is almost 9 per cent of GDP, consuming all housing financial savings, keeping market interest rates elevated and impeding monetary transmission. Any stimulus will likely be counter-productive, simply pushing-up interest rates further, accentuating crowding-out risks and financial fragilities in the NBFC sector. Monetary policy has been eased but is not transmitting, with the yield curve still very steep, and bank lending rates barely budging.
What then can policy-makers do to arrest the slowdown? While markets remain focused on the demand side, the optimal response, in our view, is to focus on the supply side. Fixing the plumbing in three areas must constitute the near-term policy agenda:
1. NBFCs: its solvency, not liquidity
The relentless pressure that NBFCs have been under since last year has translated into their credit offtake collapsing , thereby compounding the consumption slowdown. While bank credit has stepped-in, it cannot completely offset it, because these are very different business models that target different end-users.
The NBFC slowdown shouldn’t be surprising. Financial conditions have meaningfully tightened in the sector with average spreads of NBFC bonds significantly above their pre-IL&FS levels. Importantly, this is despite liquidity conditions easing. Interbank system liquidity has eased, core-liquidity is now in a surplus, and several NBFCs are holding much higher cash levels on their books. Despite that, spreads have not softened, clearly suggesting these are reflecting credit risk, and not liquidity, premia. Mutual fund flows have dried up and even bank lending to NBFCs — a key source of refinancing and disbursements — has slowed, suggesting banks, too, may be getting wary of credit risk. Contrary to the market clamour, therefore, this is not a liquidity problem. It’s an underlying solvency concern.
A missing middle?
This, by itself, should not warrant any policy intervention. Lenders re-assessing risk and charging higher risk premia is just the market mechanism playing itself out. Any intervention will simply induce moral hazard. That said, there is a growing concern that asymmetric information may be compromising allocative efficiency. The best NBFCs are easily able to attract funding and those with the most well-known vulnerabilities have understandably been rationed out. The problem is not at the extremes. It’s likely in the “missing middle”. It’s likely that a vast swathe of NBFC s in the middle are unable to attract funding or raise equity, because investors are unsure about their underlying asset quality. This is the classic asymmetric information problem. One can’t distinguish good apples from the bad ones, and so stops lending to all apples. In turn, this is forcing several NBFCs to demonstrably hoard cash — and thereby cut back on disbursements — to “signal” that are not amongst the bad apples. But this is a very inefficient signaling mechanism. More generally, asymmetric information about underlying asset quality is leading to allocative inefficiency and weighing on financing, equity raising, credit off-take and therefore on GDP growth.
Needed: credible signaling
What is therefore needed is a credible external signaling mechanism. This can best be provided by the regulator undertaking an asset quality review (AQR) of the NBFC sector. Once concluded, this would credibly distinguish the good apples from the bad apples, eliminate the “trust deficit” that looms over the sector, and allow the good apples to raise equity and funding. Operationally, an AQR will need to be delicately handled and artfully managed. It may lead to temporary disruption. But doing nothing also has a very real cost — the risk of accidents and that of foregone growth, quarter after quarter.
2. The fiscal-monetary tango
A credible Budget in July is critical. Actual revenue collections in 2018-19 are likely to be much below the revised estimates, making the projected revenues for next year virtually unattainable. The government must therefore (i) reiterate its fiscal deficit target of 3.4 per cent of GDP; (ii) but do so by credibly budgeting revenues and expenditures; (iii) and ensuring that legitimate budgetary payments — like to Food Corporation of India — are not pushed off-balance sheet. Barring this, bond markets are likely to get nervous again, and build in more risk-premia into bond yields, thereby pushing up the cost of capital further. A credible Budget, however, rests squarely on GST revenues increasing markedly, which will necessitate further simplification of the GST and meaningfully-tighter compliance mechanisms.
A credible Budget will also help in boosting monetary transmission. First, it will balm bond yields and ease financial conditions. Second, if bond yields are lower, small savings rates — linked to bond yields — should also come down, making bank deposits more attractive, boosting deposit growth, and helping monetary transmission in the banking system. Third, rampant non-compliance of GST pushed up currency-in-circulation (CIC) in 2018-19. If GST compliance is tightened, CIC growth will fall, deposit growth will rise and provide more fillip to monetary transmission. Fourth, how a fiscal deficit is met matters for growth. Meeting the deficit by slashing public investment — where fiscal multipliers are arguably higher — versus tightening indirect tax collections — can have meaningful implications for growth.
In contrast, if markets worry about fiscal credibility, and monetary policy is simultaneously eased, the yield curve will steepen further, inducing the financial sector to borrow short and lend long — as the margin of temptation from maturity transformation increases – but accentuating financial fragility.
3. Reversing the terms of trade
Tackling agrarian distress — by trying to correct the adverse terms of trade from low food prices —must constitute the third near-term priority. There is limited space on the demand side. The PM Kisan scheme should boost food demand, but total spend is just 0.4 per cent of GDP, and there is no fiscal space for more.
Instead, the answer lies on the supply side. There are early signs that some wholesale food prices have begun to pick-up. Distortive policies — like the stock-holding limits, intermittent export bans, and the Essential Commodities Act — must be done away with, so that some normalisation of food prices is accommodated. Simultaneously, the new government needs to ensure that surplus production is quickly exported to avoid domestic gluts.
Markets are clamouring for stimulus and romanticising about big-bang reforms. But the new administration’s immediate priority must be to stabilise the economic boat by first fixing the plumbing.
The writer is Chief India Economist at J P Morgan

Nirmala Sitharaman second woman Finance Minister after Indira Gandhi

Prime Minister Narendra Modi on Friday surprised markets by naming Nirmala Sitharaman, formerly the country’s defence minister, as the next finance minister at a time when Asia’s third-largest economy is stuttering.
Sitharaman, 59, will become the senior most woman minister in Modi’s cabinet and the second woman to head the finance department after late former prime minister Indira Gandhi.
Amit Shah, chief of the Hindu nationalist Bharatiya Janata Party (BJP), was appointed as the minister of home affairs, giving him responsibility for internal security with a control over the federal police.
Regarded as the architect of Modi’s landslide victory in the recently concluded general election, Shah replaces senior BJP leader Rajnath Singh, who will now be defence minister.
Shah had been tipped as a possible candidate for the finance ministry in recent days, but the job went to Sitharaman, who has an economics background and was briefly the junior finance minister in Modi’s first term.
Unlike Shah and former Finance Minister Arun Jaitley, who opted out of this government due to ill health, Sitharaman is seen as a political lightweight.
Sitharaman was among the three women who became part of the Union Cabinet in the 17th Lok Sabha.
Before Sitharaman, Indira Gandhi was the only female Finance Minister who served for a short period.
It is a big surprise and very unexpected news,” said Yogesh Nagaonkar, founder and chief executive of Rowan Capital Advisors in Mumbai. “The initial expectation of the market from her would be to see how she addresses liquidity concerns. We need to have good liquidity in the market to achieve growth.”
Nagaonkar said the ministry should have gone to Piyush Goyal, a chartered accountant who had stepped into the role twice in the previous government when Jaitley was out sick.
Goyal will now be minister of railways and commerce, at a time when trade ties with the United States are straining.
Sitharaman will take over the finance ministry when there is pressure from industry for the government to provide some stimulus to halt a worrying slowdown in India’s $2.7 trillion economy.
India probably lost its spot as the fastest growing major economy to China in the January-March quarter as a chill in domestic and global consumer demand hit manufacturers and service providers. Data for the quarter is set to be released later on Friday.
The government is already considering rolling out a slew of ‘big-bang’ economic reforms in the first 100 days of Modi’s second term, with a focus on privatisation of state assets and relaxation of labour and land rules for businesses, a top official at the government’s main think tank told Reuters.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Modi cabinet ministers full list: Amit Shah Home Minister, Sitharaman FM

The Narendra Modi government on Friday announced the allocation of the Cabinet portfolios. In a surprise move, Amit Shah, who was speculated to be appointed as the new finance minister, became the Home Minister with Nirmala Sitharaman becoming the new Finance Minister. Rajnath Singh has been appointed as the new Defence Minister and S Jaishankar new External Affairs Minister.
Smriti Irani, who was expected to be awarded handsomely for defeating Rahul Gandhi in Amethi, has been made the Minister of Women and Child Development and Minister of Textiles.
Nirmala Sitharaman will be the first woman Finance Minister after Indira Gandhi, when she was the prime minister. Sitharaman had achieved a similar feat when she was made the Defence Minister in the previous Modi government.
There was no surprise, however, in the External Affairs Ministry as the inclusion of former Foreign Secretary S Jaishankar and the axing of Sushma Swaraj from the council of ministers left no doubt where he was headed.
The Prime Minister also fulfilled his campaign promise of setting up a Ministry of Jal Shakti to deal with all water, a scarce resource, related issues. Gajendra Singh Shekhawat, who won from Jodhpur, will be the first leader to head the Jal Shakti Ministry.

ALSO READ: LIVE: Amit Shah made Home Minister; Modi govt cabinet portfolios announced
Among other significant changes, former Uttarakhand Chief Minister Ramesh Pokhriyal Nishank will be the Human Resource Development Ministry (HRD), replacing Prakash Javedkar who gets back environment, forest and climate change and the Ministry of Information and Broadcasting.
Harsh Vardhan has been made the new Health Minister replacing J.P. Nadda, who was dropped amidst speculations that he could be made the new BJP President as the Himachal Pradesh leader is considered close to Modi.
Uttar Pradesh BJP chief Mahendra Nath Pandey gets skill development, a Ministry close to PM's heart but has not taken off in the manner it was perceived to be.
But many ministers have retained their portfolios. Most notable among them is Ravi Shankar Prasad, who continues to be Law Minister and will also be Minister for Communication and Electronics and IT.
Piyush Goyal, who was also in the race to become Finance Minister, retains his railways portfolio and also gets Commerce and Industry. Dharmendra Pradhan also retains Petroleum Ministry. His other portfolio is steel.
ALSO READ: Modi 2.0 Cabinet: Here is the full list of ministers in the new government
Following is the list of portfolios allocated:
Narendra Modi: Prime Minister and also in-charge of Ministry of Personnel, Public Grievances and Pensions; Department of Atomic Energy; Department of Space; and All important policy issues; and All other portfolios not allocated to any Minister.
Cabinet Ministers
1. Rajnath Singh - Minister of Defence
2. Amit Shah - Minister of Home Affairs
3. Nitin Gadkari - Minister of road transport and highways; and minister of micro, small and medium enterprises
4. D V Sadananda Gowda: Minister of Chemicals and Fertilizers
5. Nirmala Sitharaman - Minister of Finance and corporate affairs
6. Ram Vilas Paswan - Minister of Consumer Affairs, Food and Public Distribution
7. Narendra Singh Tomar - Minister of Agriculture and Farmers Welfare; Minister of Rural Development; and Minister of Panchayati Raj
8. Ravi Shankar Prasad - Minister of Law and Justice; Minister of Communications; and Minister of Electronics and Information Technology
9. Harsimrat Kaur Badal - Minister of Food Processing Industries
10. Thaawar Chand Gehlot: Minister of Social Justice and Empowerment
11. Subrahmanyam Jaishankar: Minister of External Affairs
12. Ramesh Pokhriyal: Minister of Human Resource Development
13. Arjun Munda: Minister of Tribal Affairs
14. Smriti Zubin Irani - Minister of Women and Child Development; and Minister of Textiles
15. Dr Harsh Vardhan: Minister of Health and Family Welfare; Minister of Science and Technology; and Minister of Earth Sciences.
16. Prakash Javadekar - Minister of Environment, Forest and Climate Change; and Minister of Information and Broadcasting
17. Piyush Goyal - Minister of Railways; and Minister of Commerce and Industry
18. Dharmendra Pradhan - Minister of Petroleum and Natural Gas; and Minister of Steel
19. Mukhtar Abbas Naqvi: Minister of Minority Affairs
20. Pralhad Joshi: Minister of Parliamentary Affairs; Minister of Coal; and Minister of Mines.
21. Dr Mahendra Nath Pandey: Minister of Skill Development and Entrepreneurship
22. Arvind Ganpat Sawant: Minister of Heavy Industries and Public Enterprise
23. Giriraj Singh: Minister of Animal Husbandry, Dairying and Fisheries
24. Gajendra Singh Shekhawat: Minister of Jal Shakti
Here is the full list of Ministers of State (Independent Charge)
1. Santosh Kumar Gangwar: Minister of State (Independent Charge) of the Ministry of Labour and Employment.
2. Rao Inderjit Singh: Minister of State (Independent Charge) of the Ministry of Statistics and Programme Implementation; and Minister of State (Independent Charge) of the Ministry of Planning.
3. Shripad Yesso Naik : Minister of State (Independent Charge) of the Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); and Minister of State in the Ministry of Defence.
4. Jitendra Singh: Minister of State (Independent Charge) of the Ministry of Development of North Eastern Region; Minister of State in the Prime Minister's Office; Minister of State in the Ministry of Personnel, Public Grievances and Pensions; Minister of State in the Department of Atomic Energy; and Minister of State in the Department of Space.
5. Kiren Rijiju: Minister of State (Independent Charge) of the Ministry of Youth Affairs and Sports; and Minister of State in the Ministry of Minority Affairs.
6. Prahalad Singh Patel: Minister of State (Independent Charge) of the Ministry of Culture; and Minister of State (Independent Charge) of the Ministry of Tourism.
7. Raj Kumar Singh: Minister of State (Independent Charge) of the Ministry of Power; Minister of State (Independent Charge) of the Ministry of New and Renewable Energy; and Minister of State in the Ministry of Skill Development and Entrepreneurship.
8. Hardeep Singh Puri: Minister of State (Independent Charge) of the Ministry of Housing and Urban Affairs; Minister of State (Independent Charge) of the Ministry of Civil Aviation; and Minister of State in the Ministry of Commerce and Industry.
9. Mansukh L Mandaviya: Minister of State (Independent Charge) of the Ministry of Shipping; and Minister of State in the Ministry of Chemicals and Fertilizers.
Ministers of State
1. Faggansingh Kulaste - Minister of State in the Ministry of Steel
2. Ashwini Kumar Choubey - Minister of State in the Ministry of Health and Family Welfare
3. Arjun Ram Meghwal - Minister of State in the Ministry of Parliamentary Affairs; and Minister of State in the Ministry of Heavy Industries and Public Enterprises
4. General (Retd.) V K Singh - Minister of State in the Ministry of Road Transport and Highways
5. Krishan Pal - Minister of State in the Ministry of Social Justice and Empowerment
6. Danve Raosaheb Dadarao - Minister of State in the Ministry of Consumer Affairs, Food and Public Distribution
7. G Kishan Reddy - Minister of State in the Ministry of Home Affairs
8. Parshottam Rupala - Minister of State in the Ministry of Agriculture and Farmers Welfare
9. Ramdas Athawale - Minister of State in the Ministry of Social Justice and Empowerment
10. Niranjan Jyoti - Minister of State in the Ministry of Rural Development
11. Babul Supriyo - Minister of State in the Ministry of Environment, Forest and Climate Change
12. Sanjeev Kumar Balyan - Minister of State in the Ministry of Animal Husbandry, Dairying and Fisheries
13. Dhotre Sanjay Shamrao - Minister of State in the Ministry of Human Resource Development; Minister of State in the Ministry of Communications; and Minister of State in the Ministry of Electronics and Information Technology
14. Anurag Singh Thakur - Minister of State in the Ministry of Finance; and Minister of State in the Ministry of Corporate Affairs.
15. Angadi Suresh Channabasappa - Minister of State in the Ministry of Railways
16. Nityanand Rai - Minister of State in the Ministry of Home Affairs
17. Rattan Lal Kataria - Minister of State in the Ministry of Jal Shakti; and Minister of State in the Ministry of Social Justice and Empowerment
18. V Muraleedharan - Minister of State in the Ministry of External Affairs; and Minister of State in the Ministry of Parliamentary Affairs
19. Renuka Singh Saruta - Minister of State in the Ministry of Tribal Affairs
20. Som Parkash - Minister of State in the Ministry of Commerce and Industry
21. Rameswar Teli - Minister of State in the Ministry of Food Processing and Industries
22. Pratap Chandra Sarangi - Minister of State in the Ministry of Micro, Small and Medium Enterprises; and Minister of State in the Ministry of Animal Husbandry, Dairying and Fisheries.
23. Kailash Choudhary - Minister of State in the Ministry of Agriculture and Farmers Welfare
24. Debasree Chaudhuri - Minister of State in the Ministry of Women and Child Development

Farmers, traders get the high table at PM Modi's first cabinet meeting

The government will extend a programme of handing Rs 6,000 a year to all 14.5 crore farmers in the country, Prime Minister Narendra Modi's cabinet decided on Friday in its first meeting after winning elections.
The government will also launch a Rs 10,000 crore pension scheme for 5 crore farmers, said agriculture Narendra Singh Tomar as he announced measures that the BJP-led National Democratic Alliance (NDA) had promised in its election pitch.

In the interim budget for the 2019/20 fiscal year presented in February, Modi's last government had started the direct cash support programme for 12 crore poor and small farmers as part of efforts to placate growers struggling with weak crop prices.
The revised PM Kisan scheme envisages to cover 2 crore more farmers with an estimated expenditure of Rs 87,217.50 crore in 2019-20, reported news agency IANS. The previous government had estimated annual expenditure of Rs 75,000 crore in the earlier version of the scheme.
The decision is expected to address the farm sector distress that has gripped the rural economy for some time now. One of the key contributors to the GDP growth, the agriculture and allied activities shrank in the financial year 2018-19.
As per the official data released on Friday, the agriculture sector grew at 2.9 per cent in FY-19 as against the growth rate of 5 per cent in the previous year.
The government also approved a minimum monthly pension of Rs 3,000 to all shopkeepers, retail traders and self-employed persons after attaining the age of 60 years, fulfilling its poll promise.
The decision will benefit 3 crore retail traders and shopkeepers, reported news agency PTI.
Five crore traders are expected to join the scheme in the next three years, Union Minister Prakash Javadekar said.

Growth of 8 core sector industries slows to 2.6% in April

The growth of eight core infrastructure sectors slowed down to 2.6 per cent in April, due to negative growth in crude oil, natural gas and fertiliser output.
During April 2018, the expansion rate of eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- stood at 4.7 per cent.

Coal generation growth was flat at 2.8 pet cent in April 2019, said the government data.
The output of electricity and refinery products was 5.8 per cent and 4.3 per cent, respectively.
Crude oil, natural gas, and fertilizers sectors posted decline in growth during the month.
The infrastructure sector growth has impact on the Index of Industrial Production (IIP) as these segments account for about 41 per cent of the total factory output.

Unemployment rate at 6.1% in 2017-18, highest in 45 years: Govt data

Confirming unemployment rate projected in a pre-election leaked report, the government on Friday said joblessness in the country was 6.1 per cent of total labour force during 2017-18, the highest in 45 years.
The data released by the government on a day when Modi 2.0 Cabinet took charge showed 7.8 per cent of all employable urban youth being jobless, while the percentage for the rural was 5.3 per cent.
The joblessness among male on all India basis was 6.2 per cent, while it was 5.7 per cent in case of females.

Govt meets its interim budget fiscal deficit target of 3.4% for 2018-19

The fiscal deficit for 2018-19 came in at 3.39 per cent of GDP, marginally lower than 3.4 per cent estimated in the revised estimates of the Budget, mainly due to increase in non-tax revenue and lower expenditure.
In absolute terms, fiscal deficit at the end of March 31, 2019, stood at Rs 6.45 trillion as against Rs 6.34 trillion in the revised estimates of Budget.

The fiscal deficit data was released by Controller General of Accounts (CGA).
Although in absolute terms the fiscal deficit has gone up, but as a percentage of GDP the deficit figure has come down marginally, mainly on account of GDP expansion in 2018-19 -- data of which will be released later in the day.

FM Nirmala Sitharaman's first budget speech on July 5

Finance Minister Nirmala Sitharaman will present the full-year budget on July 5, the government said on Friday a day after being sworn in for a second term.
Sitharaman face major challenges, as government data released on Friday showed that India's economy grew at a much-lower-than-expected 5.8% in the January-March period. That is its slowest pace in 17 quarters, and increases pressure for economic stimulus from the government and the central bank through tax cuts and lower interest rates.

Parliament's budget session will be held from June 17 to July 26 during which a new speaker for the Lok Sabha will be elected.

GDP growth slips to 5.8% in Q4, stands at 5-year low of 6.8% in full FY19

The rate of gross domestic product (GDP) growth in the January-March quarter of 2018-19 slipped to 5.8 per cent, mainly due to a slowdown seen in the country’s key sectors like agriculture, industry and manufacturing in the past nine months. The economic growth rate for the full 2018-19 financial year stood at a 5-year low of 6.8 per cent, showed data released by the Central Statistics Office (CSO) on Friday. The numbers were way below the forecast of 6.5 per cent for the March quarter and 7.1 per cent for FY19.
The country’s fiscal deficit in full 2018-19 stood at 3.4 per cent of GDP, roughly in line with the Interim Budget estimate. Spending during the financial year was Rs 23.1 trillion, against the revised target of Rs 24.1 trillion.

The rate of growth in eight core infrastructure industries during April 2019 came to 2.6 per cent, against 4.9 per cent in the previous month.
The unemployment rate for 2017-18 stood at 6.1 per cent, showed labour survey data of the National Sample Survey Organisation (NSSO), also released on Friday. The rate of urban unemployment stood at 7.8 per cent, while the rate for rural India was 5.3 per cent.
Gross value added (GVA) growth for FY19 came in at 6.6 per cent. The sectors which registered growth GDP rate of over 7 per cent in FY19 are 'public administration, defence and other services’ (8.6 per cent), construction (8.7 per cent), financial, real estate and professional services (7.4 percent), 'electricity, gas, water supply & other utility services (7 per cent)’. The growth in the ‘agriculture, forestry and fishing’, ‘mining & quarrying’, ‘manufacturing’and ‘trade, hotels, transport, communication and services related to broadcasting’ punched in at 2.9 per cent, 1.3 per cent, 6.9 per cent and 6.9 per cent respectively.
The country's economy had grown at 6.6 per cent in the quarter ended December.
The slowdown and the low GDP figures do not come as a surprise, as the finance ministry had itself said so in its monthly report for March. The report had said that India's economy slowed down slightly in the last financial year due to declining growth in private consumption, slow increase in fixed investment and muted exports.
The GDP data for the April-June and July-September quarters of 2018-19 had also be revised to 8 per cent and 7 per cent, respectively. The slowdown reached a high point with the country's industrial output touching a 21-month low in March. Factory output, as measured in terms of the Index of Industrial Production (IIP), had grown by 5.3 per cent in March 2018, according to CSO data.

Jaypee Infratech's creditors to discuss NBCC acquisition bid on May 30

Debt-laden Jaypee Infratech's financial creditors, which include bankers and homebuyers, will meet on May 30 to discuss state-owned NBCC's bid to acquire the realty firm and complete stuck housing projects.
A meeting of Committee of Creditors (CoC) has been called on May 30, sources said. As many as 13 banks and 23,000 homebuyers have voting rights in the committee.

Earlier this month, creditors rejected a bid by Mumbai-based Suraksha Realty through a voting process.
Later, the CoC decided to put on vote the NBCC's offer even as bankers were opposed to this move citing certain conditions in the resolution plan submitted by the public sector firm.
On the bankers' plea, the National Company Law Appellate Tribunal (NCLAT) had on May 17 annulled voting by homebuyers and lenders on NBCC's bid and allowed renegotiation on the offer by May 30. The voting process could start from May 31.
At present, bankers and NBCC are negotiating on the latter's bid to acquire Jaypee Infratech.
Sources had earlier said that NBCC was unlikely to dilute certain conditions, including exemption from future tax liability, mentioned in its bid but the public sector firm was open to negotiating on the offer related to unsold flats.
Lenders have shown reluctance to acquire up to 2,207 unsold flats worth Rs 1,756 crore as proposed by NBCC in its revised offer.
In its latest offer, NBCC has proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.
On this bid, lenders had reservations on certain concessions sought by NBCC and had sought clarifications from the firm.
However, NBCC decided not to dilute the conditions of exemption from future income tax liability as well as from taking consent of development authorities for transfer of businesses, including land parcels and Yamuna Expressway.
Clarifications from the NBCC were sought in the wake of Jaypee Infratech's Interim Resolution Professional (IRP) Anuj Jain flagging to the lenders that the state-owned firm's bid was conditional and non-binding.
The IRP had written to the CoC that NBCC's revised bid was conditional as the plan would not be binding unless key relief measures such as extinguishing of income tax liability and exemption from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer were taken.
In 2017, Jaypee Infratech went into insolvency process after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium seeking revival of the realty firm.
In the first round of insolvency proceedings conducted last year, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
Later in October 2018, the IRP started the second round of bidding process to revive Jaypee Infratech on the NCLT's direction.

L&T picks up additional Rs 316-cr Mindtree shares, increases stake to 28%

Infrastructure major Larsen and Toubro (L&T) has raised its stake in IT firm Mindtree by about 2 per cent between May 20-24 by picking up shares worth over Rs 316 crore, according to regulatory data.
The development assumes significance as L&T has already acquired around 20 per cent stake in the mid-sized IT firm from V G Siddhartha and Cafe Coffee Day and is keen to increase its shareholding up to 66 per cent.

According to BSE data, L&T acquired shares from the open market throughout the week with the highest quantum of shares being purchased on May 24 when it picked up nearly 2.5 million shares of Mindtree at Rs 980 apiece.
A back-of-the-envelope calculation shows that the company spent over Rs 316 crore during the week for these transactions which took its overall shareholding to 28.45 per cent from 26.48 per cent at the start of the week.
In multiple tranches, L&T mopped up about 3.26 million shares during the said week. Shares of Mindtree ended flat at Rs 980 apiece on the BSE on Friday.
In March, L&T mounted a hostile takeover bid on Mindtree when it entered into a deal to buy Cafe Coffee Day owner V G Siddhartha's 20.32 per cent stake in Mindtree and also placed an order with brokers to pick up another 15 per cent of the company shares from the open market.
Subsequent to these deals, L&T was to also make an open offer to buy additional stake. In all, the infrastructure major is eyeing up to 66 per cent stake in Mindtree for around Rs 10,800 crore.
L&T's open offer - which was earlier slated to begin on May 14 - has been postponed as the engineering major is awaiting a nod from the Securities and Exchange Board of India.
In a recent interview to PTI, L&T Group Chairman A M Naik had said the acquisition of Mindtree is the topmost agenda for the company at the moment.
"Right now, our mind is completely occupied on Mindtree and I hope, we will be able to eventually make this into a big company as well...We have got around 26 per cent stake in Mindtree and now, we will wait till we get 51 per cent," he had said adding that the offer would be launched in a fortnight's time.

Shaktikanta Das meets Jaitley; govt says reports on FM's health 'baseless'

Reserve Bank Governor Shaktikanta Das called on outgoing Finance Minister Arun Jaitley here on Sunday.
The governor in a tweet said that it was a courtesy meeting.

"Had a courtesy meeting with Hon'ble Union Minister @arunjaitley this evening," Das tweeted while posting a picture of the meeting.
His tweet came amid speculations in some media on the state of Jaitley's health.
Dispelling such remours, the government Sunday said reports on the deteriorating health of Jaitley are false and baseless, and media should stay clear of rumour mongering.
"Reports in a section of media regarding Union Minister Shri Arun Jaitley's health condition are false and baseless. Media is advised to stay clear of rumour mongering," government spokesperson Sitanshu Kar tweeted.
Jaitley's college friend and media baron Rajat Sharma as well as Rajya Sabha MP Swapan Dasgupta also rejected reports on deteriorating health of the senior BJP leader.
Dasgupta tweeted that he met Jaitley Sunday afternoon and presented a copy of his book to him. In another tweet, he said, "Actually he is off all medication now. Just recovering his strength and working as usual. He is still meeting officials."
"Questions about @arunjaitley health understandable. He is recovering from a bout of heavy medication. But he is still in terrific form and his wit is firmly intact. Needs a little rest to get back his strength. All our good wishes," the MP tweeted.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Imran Khan dials PM Modi, seeks better ties between India and Pakistan

Breaking the ice in bilateral ties, Pakistan Prime Minister Imran Khan on Sunday spoke to his Indian counterpart Narendra Modi and expressed his desire to work together for the betterment of their peoples, the Foreign Office said here.
Khan's telephone call to Modi came days after the cricketer-turned-politician congratulated on Twitter the Indian Prime Minister on his massive electoral victory in the general elections.

Prime Minister Modi on Thursday led his Bharatiya Janata Party to a landmark victory for a second five-year term in office, winning 302 seats in the 543-member Lok Sabha.
Foreign Office spokesman Mohammad Faisal said that Khan also congratulated Modi on his party's electoral victory in the Lok Sabha elections.
Reiterating his vision for peace, progress and prosperity in South Asia, Prime Minister Khan said he looks forward to working with Prime Minister Modi to advance these objectives, Faisal said on Twitter.

Dr Mohammad Faisal
@DrMFaisal
PM spoke to PM Modi today and congratulated him on his party’s electoral victory in Lok Sabha elections in India. PM expressed his desire for both countries to work together for betterment of their peoples.
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Khan expressed his desire for both countries to work together for betterment of their peoples, he added.
The results of India's general elections are very significant for Pakistan as the formation of the next government in New Delhi will determine the course of Indo-Pakistan ties, which were pushed to a new low after the Pulwama terror attack.
In April, Khan said he believed there may be a better chance of peace talks with India and settle the Kashmir issue if Modi's party BJP wins the general elections.
Just a day before the announcement of results, Pakistan's Foreign Minister Shah Mahmood Qureshi and his Indian counterpart Sushma Swaraj exchanged pleasantries on the sidelines of the Shanghai Cooperation Organisation Council of Foreign Ministers' meeting in Bishkek, Kyrgyzstan and conveyed to her Pakistan's desire to resolve all issues through dialogue.
Tensions flared up between India and Pakistan after a suicide bomber of Pakistan-based Jaish-e-Muhammed (JeM) killed 40 CRPF personnel in Kashmir's Pulwama district on February 14.
Amid mounting outrage, the Indian Air Force (IAF) carried out a counter-terror operation, hitting the biggest JeM training camp in Balakot, deep inside Pakistan on February 26. The next day, Pakistan Air Force retaliated and downed a MiG-21 in an aerial combat and captured an IAF pilot, who was handed over to India.
Khan expressed his desire for both countries to work together for betterment of their peoples, he added.
The results of India's general elections are very significant for Pakistan as the formation of the next government in New Delhi will determine the course of Indo-Pakistan ties, which were pushed to a new low after the Pulwama terror attack.
In April, Khan said he believed there may be a better chance of peace talks with India and settle the Kashmir issue if Modi's party BJP wins the general elections.
Just a day before the announcement of results, Pakistan's Foreign Minister Shah Mahmood Qureshi and his Indian counterpart Sushma Swaraj exchanged pleasantries on the sidelines of the Shanghai Cooperation Organisation Council of Foreign Ministers' meeting in Bishkek, Kyrgyzstan and conveyed to her Pakistan's desire to resolve all issues through dialogue.
Tensions flared up between India and Pakistan after a suicide bomber of Pakistan-based Jaish-e-Muhammed (JeM) killed 40 CRPF personnel in Kashmir's Pulwama district on February 14.
Amid mounting outrage, the Indian Air Force (IAF) carried out a counter-terror operation, hitting the biggest JeM training camp in Balakot, deep inside Pakistan on February 26. The next day, Pakistan Air Force retaliated and downed a MiG-21 in an aerial combat and captured an IAF pilot, who was handed over to India.

In next 5 years India will regain its lost position in world order: Modi

Prime Minister Narendra Modi on Sunday said the next five years will be the time to regain the rightful position of India in the world order.
He was speaking here at a function following the Lok Sabha election victory, which was kept simple and shorn of pomp because of the Surat fire tragedy. “Next five years will be very important in the history of the country, as was the period between 1942 and 1947,” Modi said addressing a huge gathering. “Next five years will be the time to regain the rightful position of India in the world order. In the past our country had that place. I am sure India will regain its importance in the world order,” he said.

He also expressed grief over the death of 22 students in Surat building fire tragedy. “Till yesterday, I was in two minds whether to go for this felicitation function or not as on one hand, there was kartvya (duty) and on the other hand, there was karuna (compassion) for those who died in Surat. No amount of words can reduce the grief of the families who have lost their children in that tragedy,” he said. The function was kept simple in the wake of the tragic incident in Surat, he noted.
The prime minister addressed the gathering at JP Chowk outside the BJP office in Khanpur area, its former state headquarters before it shifted to Gandhinagar. It now houses the party’s city unit office.
Modi reminisced that he had spent many years in this small office during his initial days as a politician. He had last addressed a gathering at JP Chowk when BJP won the 2012 Assembly polls, he recalled.
The Lok Sabha results stunned all the political pundits, Modi said. “During the campaigning for the sixth phase, I had, for the first time, said we will cross 300 seats. At that time, many people made fun of my statement... I saw during the campaigning that people were keen to reinstate this government. People wanted to strengthen the government. They knew that their votes will provide guarantee of security and bring prosperity,” he said.
“This is a pro-incumbency vote. A vote to reinstate the present government. In the beginning of the poll campaign, I had told it is not BJP or its candidates who are contesting, it is the people who are contesting the polls... The word ‘wave’ is too small to describe the poll results this time,” he said. This big mandate brings big responsibilities. It is important to remain humble and grounded in the wake of such a massive win.
The BJP leader also remembered the victims of the devastating fire in Surat two days ago, and said he was in a dilemma as to whether he should address such a gathering in the immediate aftermath of the incident that claimed 22 lives.

43% of newly elected Lok Sabha MPs faces criminal charges: Report

Nearly half of the newly-elected Lok Sabha members have criminal charges against them, a 26 per cent increase as compared to 2014, according to the Association of Democratic Reforms.
Of the 539 winning candidates analysed by the ADR, as many as 233 MPs or 43 per cent have criminal charges.

The BJP has 116 MPs or 39 per cent of its winning candidates with criminal cases, followed by 29 MPs (57 per cent) from the Congress, 13 (81 per cent) from the JDU, 10 (43 per cent) from the DMK and nine (41 per cent) from the TMC, the ADR said.
In 2014, 185 Lok Sabha members (34 per cent) had criminal charges and 112 MPs had serious criminal cases against them. In 2009, 162 (nearly 30 per cent) out of the 543 Lok Sabha MPs had criminal charges and 14 per cent had serious criminal charges, it said.
In the new Lok Sabha, nearly 29 per cent of the cases are related to rape, murder, attempt to murder or crime against women, the non-governmental organisation said.
"There is an increase of 109 per cent (in 2019) in the number of MPs with declared serious criminal cases since 2009," it said.
Eleven winners -- five from the BJP, two from the BSP, one each from the Congress, NCP and the YSR Congress Party, and an Independent -- have murder charges against them, the ADR said.
Pragya Singh Thakur, the newly-elected BJP MP from Bhopal, faces terror charges in connection with the 2008 Malegaon blasts. The Bharatiya Janata Party has faced a lot of criticism for fielding her.
Moreover, 29 winners have declared cases related to hate speech, it said.
Dean Kuriakose from the Congress, who won from the Idukki constituency in Kerala, has 204 criminal cases against him, including culpable homicide, house trespass, robbery, criminal intimidation, it added.

Switzerland steps up sharing banking info; 11 Indians get notices in a day

Switzerland  has since March sent at least 25 notices to Indian clients of its banks, giving them a chance to appeal before it gives information about them to the Indian government.
An analysis of the notices issued by the Federal Tax Administration, Switzerland government's nodal department for sharing of information on foreign clients of Swiss banks, shows that the country has shared information with a number of countries, but the surge in India-related cases is noticeable in the past few weeks.

At least 11 notices were issued to Indians in one day--on May 21 . The Swiss government's gazette notifications redacted the full names of bank clients and gave initials, nationality and the dates of birth.
The two Indians whose names have been mentioned in full are Krishna Bhagwan Ramchand (born in May 1949) and Kalpesh Harshad Kinariwala (born in September 1972). However, no further details have been disclosed about them as well.
The Indian nationals with redacted names include Mrs A S B K (born November 24, 1944), Mr A B K I (born July 9, 1944), Mrs P A S (born November 2, 1983), Mrs R A S (born November 22, 1973), Mr A P S (born November 27, 1944), Mrs A D S (born August 14, 1949), Mr M L A (born May 20, 1935), Mr N M A (born February 21, 1968) and Mr M M A (June 27, 1973).
In these notices, the individuals or their authorised representatives have been asked to file their appeals within 30 days with necessary documentary proof to support their case against providing 'administrative assistance' to India, which broadly means sharing of their banking and other financial details.
Earlier this month on May 7, a similar notice was issued to another Indian national, Ratan Singh Chowdhury, giving an option to appeal within ten days, while another Indian national with redacted name, Mr R P N, was given 30 days on May 14.
In April also, some such notices were issued including to one Mrs J N V, as also to Mr Kuldip Singh Dhingra and Anil Bhardwaj, among others.
Several of these names are said to have figured in the leaked HSBC lists and Panama papers which allegedly contained names of Indians with Swiss bank accounts and are being probed by Indian authorities in alleged black money cases.
In case of Krishna Bhagwan Ramchand and Kalpesh Harshad Kinariwala, such notices were issued in April as well and fresh notices have been served to them presumably after their responses to the earlier notices.
Before that in March, Switzerland had issued such notices to Mumbai-based Geodesic Ltd and its three directors (Prashant Sharad Mulekar, Pankajkumar Onkar Srivastava and Kiran Kulkarni), as also to Chennai-based Aadhi Enterprises Pvt Ltd, who are being probed by the Indian authorities for alleged money laundering and other financial irregularities.
Switzerland was widely known as an alleged safe haven for black money before it bowed down before the global pressure and agreed to bring down the famed secrecy walls that had historically surrounded the Swiss banks, provided the requesting country gave proof for financial irregularities done by the concerned person or the company.
Along with several other countries, India has also been making use of this change in the stance of Switzerland by seeking details of suspected black money hoarders in Swiss banks and it has already got back information in a large number of cases in the last few years.
As per the Swiss law, the FTA decision can be appealed within 30 days (in some cases 10 days), provided the appellant is able to give sufficient ground to challenge it.
While the Swiss government documents did not disclose specific details related to the information and assistance sought by the Indian authorities regarding these Indian companies and individuals, such an 'administrative assistance' follows submission of proof about financial and tax-related wrongdoings and typically involves sharing of information relating to bank account details and other financial data.
While Switzerland has always denied being a safe haven for black money, it has begun sharing details for last few years with several countries including India after submission of evidence about financial and tax-related wrongdoings of the clients of Swiss banks.
Besides, a new framework of automatic information exchange has been now put in place and the details can be accessed under the new system from this year.
According to Switzerland's State Secretariat for International Finance, the global standard for the automatic exchange of information (AEOI) on financial accounts is expected to increase the transparency and prevent cross-border tax evasion.
The global standard makes provision for the mutual exchange of information on financial accounts between states and territories that have agreed among themselves to the AEOI. Besides Switzerland, over 100 states and territories, including all major financial centres, have declared their intention to adopt the standard.

PM Modi to be sworn in on May 30, speculation over allocation of ministries

Prime Minister Narendra Modi and his council of ministers will take oath of office at 7 pm on May 30, the Rashtrapati Bhavan said on Sunday.
Bharatiya Janata Party (BJP) president Amit Shah is likely to get a prime slot in the council of ministers, Business Standard reported last week. Shah, who has debuted in the Lok Sabha, could join the Cabinet Committee on Security (CCS) of the second Modi government, sources said. Apart from the prime minister, the CCS comprises the top four of the government – defence, home, external affairs and finance ministers.
Jaitley met the top officers of his ministry on Friday to discuss the budget, but concerns remain if his health will permit him to handle ministry at a juncture for the economy.
It remains to be seen if Nirmala Sitharaman, who ably defended the government on the alleged irregularities in the Rafale fighter jet deal, would continue to remain defence minister, and whether Railway Minister Piyush Goyal, who has emerged the government’s crisis manager, gets a more high-profile portfolio.
Modi’s BJP won 303 of the 542 seats up for grabs in the general elections, up from the 282 it won in 2014 and more than the 272 seats needed for a majority in the lower house of parliament.
At the BJP’s victory celebrations in New Delhi Thursday evening, Modi appealed to his workers to exhibit humility in what is the “greatest electoral triumph since the independence in 1947”.
“We have to move ahead. We have to take everyone with us, even our opponents. We have to work for the benefit of the country,” he said, adding he would not do anything with bad intent even though he might at times commit a mistake on the job.
BJP president Amit Shah and National Democratic Alliance leaders met President Ram Nath Kovind at the Rashtrapati Bhavan on Saturday and gave him a letter stating Modi has been elected the leader of the BJP Parliamentary Party.

"The President (Ram Nath Kovind) will administer the Oath of Office and Secrecy to the Prime Minister and other members of Union Council of Ministers on 30.05.2019 at 07.00 p.m. at Rashtrapati Bhavan," said a communiuqe issued by President's press secretary Ashok Malik on Sunday.

Coastal Kerala on alert after report says IS boat set sail from Lanka

Authorities in coastal areas of Kerala have been put on high alert after an intelligence report said 15 Islamic State terrorists had set off from Sri Lanka for the Lakshadweep islands on boats, police sources said.
Coastal police stations and police chiefs have been alerted about suspicious vessels.

The sources said, though, such alerts are "usual practice", this time they have a specific information about the number of terrorists.
The coastal police department said it has been on alert since May 23 after the intelligence input came from Sri Lanka.
"We have been on alert since the Sri Lankan attack. We have alerted fishing vessel owners and others venturing into the sea to be cautious," a coastal police department official told PTI.
After the serial bomb blasts in Sri Lanka, Kerala was put on alert, especially after NIA investigations revealed that IS operatives had planned attacks in the state.
Intelligence agencies believe that a considerable number of Keralities still have ties to the IS.
Sri Lanka witnessed a deadly terror attack on April 21 when eight blasts rocked the island-nation, killing over 250 people.
The Islamic State group claimed responsibility for the attack.

Why did Rahul Gandhi lose in Amethi? Here's what voters have to say

Lack of organisational network and a strong disconnect with the rural population led to the fall of the Congress stronghold Amethi, which has remained loyal to the Gandhi family since 1980.
BJP's Smriti Irani defeated the Congress chief and sitting MP Rahul Gandhi by a margin of 55,120 votes.

Though the grand old party had been comfortably winning the seat, the victory had all through been thanks to the charisma and name of the Gandhi family without the support of the party organisation, political pundits opined.
In the 2014 Lok Sabha election, Gandhi had defeated Irani by 1,07,903 votes.
On the first real challenge, in the face of a concerted campaigning by Irani, the Congress fortress came tumbling down since she had prepared and strengthened her organisation in this dusty constituency, 120 Km from the state capital.
The constituency also laments that though Rahul Gandhi had been a frequent visitor during this three stints as the MP, he had not reached the remote areas and failed to make a connect with those in the rural areas.
"Rahul used to get down at the Fursatganj airport and drive straight to Amethi and all his activities were confined there only. When he did not give enough time to the people how will he get the votes," said wholesale trader Neel Singh of Salon Navin Mandi area.
Indicating that Rahul's connect with the electorate was superficial, Raju Solanki who runs a tea stall at Salon bus stand, said, "It is his team of advisors that has spoilt his chances.
"His programmes used to be finalised around the main localities and highways but in contrast Smriti Irani reached villages and houses to establish direct dialogue with the locals, seeking votes for development and change and also benefitted through it," he explained.
The locals feel Priyanka's presence had also failed to make a difference as her programmes too were finalised by those who had little knowledge of the nerve of the constituency.
"You don't get votes merely by waving hands and moving about on the roads in big vehicles," a local, Khilawan Raj, said.
Kishori Lal, a strong Congress supporter said the new generation in the constituency are not aware of the works done by the Congress for the development of the area and so the youth got carried away by the "BJP's selling of their schemes."
"The youth here does not know that this was usar (infertile) land which was got treated during the tenure of Rajiv Gandhiji. They got carried away by the BJP propaganda, and the manner in which they literally sold the central government schemes in the election market," Lal claimed.
Asha Singh of Pipri village said Smriti Irani went to every gram panchayat for canvassing and this appears to have made an impact.
Besides, they feel that local party leadership and staff of Rahul Gandhi had adopted a very high-handed attitude towards the people.
"They seem to have held the MP's office captive... it was easy to meet Rahul Gandhi than to meet his representatives who had to take follow up action of the works assigned by him for completion," Ram Pujan, a small trader said.
Political pundits say that the process of Congress' defeat in Amethi had started with its losses in the Assembly polls.
In the 2017 UP assembly polls, the Congress failed to win even a single seat though the BJP managed to bag four and Samajwadi Party one seat in the Lok Sabha constituency.
In the 2012 Assembly polls too, the Congress had only one seat - Jagdishpur - while rivals had taken up the remaining seats.
"Why the Congress leadership preferred to ignore taking corrective measures despite a poor show in Assembly polls is not understandable," they wonder.
Union minister Irani said on Friday that her win was not a "rocket science" as people of the Lok Sabha constituency wanted a representative who would work for them for the next five years.
Her victory was due to the development agenda of the Modi government, she said, adding that people of Amethi had reposed their trust in her by voting in large numbers for the BJP in 2014 and that she worked in the past five years to keep their faith.